TMI Blog2008 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh, Addl.CIT, Range-2 (Intl. Taxn), New Delhi., Mr.R.K.Kakar,DDIT, Cir(2), (Int.Tax),New Delhi Present for the Applicant None for the applicant RULING 1. Mr. A. Sinha - M/s Singapore Tourism Board, a company incorporated in Singapore has filed this application. 2. The facts stated in the application are very brief and sketchy. The applicant states that it has liaison offices in New Delhi, Mumbai and Chennai, but it does not carry on any business activities through those offices. No income accrues or arises to the applicant in India. It has employees working in these liaison offices, and the expenses relating to the Indian offices are reimbursed from Singapore office. The applicant has also enclosed copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia because the Reserve Bank of India does not permit liaison offices of foreign companies to do so. As per the income and expenditure statement filed by the applicant, it has incurred expenses relating to staff welfare, foreign travel, entertainment, office opening, festival / events and promotional expenses activities, which would attract FBT. The learned Departmental representative submits that the ruling of this Authority in the case above applies to the present case on all fours. 6. We observe that FBT was introduced in the Act through the Finance Act, 2005 which incorporated Chapter XII-H in the Act w.e.f. 1.4.2006. It contains provisions relating to definitions, charge of fringe benefits tax, value of fringe benefits, filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T is on the employer who provides or is deemed to have provided fringe benefits to his employees. FBT is to be charged @ 30%. Sub-section(2) of this section, which starts with a non obstante clause, states that even where no income tax is payable by an employer on his total income computed in accordance with the provisions of this Act, such employer shall still be liable to pay FBT. 7. The other relevant provision is section 115WB which gives the meaning of 'fringe benefits.' It reads as follows : "Fringe benefits. 115WB. (1) For the purposes of this Chapter, "fringe benefits" means any consideration for employment provided by way of (a) any privilege, service, facility or amenity, directly or indirectly, provided by an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The following sub-clause(iii) shall be inserted after sub-clause (ii) of clause (B) of sub-section(2) of section 115WB by the Finance Act, 2008, w.e.f. 1-4-2009: (iii) any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils such other conditions as may be prescribed. (C) conference (other than fee for participation by the employees in any conference). Explanation. For the purposes of this clause, any expenditure on conveyance, tour and travel (including foreign travel), on hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purposes of conference; (D) sales promotion incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contribution to superannuation fund, etc., are 'fringe benefits'. Sub-section(2) of this section is a deeming provision, according to which certain expenditure incurred by the employer, whether for the purpose of deriving gain or otherwise, shall be deemed as provision of fringe benefits to the employees. These include entertainment, hospitality, conference, sales promotion, employees' welfare, conveyance, maintenance of guest house, festival celebrations, gifts, tour and travel, etc. As may be seen, but for the deeming fiction, many of the above specified items would not normally have come under the purview of fringe benefits, as these are not directly provided to the employees. But sub-section (2) declares them to be fringe benefits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory in nature. Inasmuch as sub-section(1) of section 115WA of the Act mandates that FBT shall be charged for every assessment year in addition to the income-tax charged under this Act, sub-section(2) thereof clarifies that even when no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, the tax on fringe benefits shall be payable by such employer. When Section 115WA of the Act says that FBT is in addition to income-tax and even when no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, it will be futile to contend that if there is no total income which can be computed in accordance with the provisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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